The Senate passed an amendment on Thursday that forces operatives who collect political intelligence in Washington for sale in the banking industry or on Wall Street to register in the same way as lobbyists do.
Sen. Chuck Grassley (R-Iowa) introduced the amendment, which garnered 60 votes versus 39 nays.
The amendment says that individuals who engage in “preparation and planning activities, research, and other background work” intended for use “analyzing securities or commodities markets, or in informing investment decisions” must register as lobbyists.
The new rule applies to anyone working on gathering political intelligence in both the legislative and executive branches.
“Political intelligence professionals aren’t considered lobbyists, so they don’t have to disclose that they’re seeking information and are paid for it” when they meet with elected officials or staffers, Grassley said in a statement. “As a result, members of Congress and congressional staff have no way of knowing whether such meetings result in information being sold to firms that trade based on that information. My amendment would shed sunshine on this kind of political intelligence gathering.”
Last October, the Wall Street Journal reported that this burgeoning cottage industry has grown to a $100 million sector, with about 2,000 people working in it in D.C.
These workers hover around the halls of Congress, hoping to capture and then sell information on legislation that would affect the banking industry or Wall Street, which then trade securities based on that information.
“You have a growing industry with no transparency,” Sen. Grassley said in a statement. “If a lobbyist has to register in order to advocate for a school or church, shouldn’t that same lobbyist have to register if they are seeking and getting inside information to make a profit on? This is especially true if that information would make millions for a hedge fund or a private equity firm.”
Prior to the amendment, these individuals did not have to register as lobbyists.
Sen. Grassley adds in his statement that this amendment will also assist Congress and congressional staff in figuring out whether individuals seeking meetings with them are really looking to get information to sell.
Senator Grassley’s amendment, #1493, came up during Senate debate on the “Stop Trading On Congressional Knowledge” bill, or STOCK Act.
The STOCK Act would bolster existing insider trading laws overseen by the Securities and Exchange Commission.
Essentially, the STOCK Act would widen insider trading laws to cover non-public information on legislation accessed by members of Congress and congressional staff. Members of Congress must report any trades made within a certain amount of time of the legislation, among other things.
“If you seek information from Congress in order to make money, the American people have a right to know your name and who you’re selling that information to,” Sen. Grassley said of his amendment. “That’s just basic good government.”
Elizabeth MacDonald joined FOX Business Network (FBN) as stocks editor in September 2007 and is the author of Skirting Heresy: The Life and Times of Margery Kempe (Franciscan Media, June 2014).
Follow Elizabeth MacDonald on Twitter @LizMacDonaldFOX.